Canadian Dollar Drops On Falling Oil Prices
27 Marzo 2017 - 02:00AM
RTTF2
The Canadian dollar drifted lower against its major counterparts
in the European session on Monday, as oil prices fell on
indications of increased drilling activity in the U.S. and as the
OPEC put off a decision to extend historic production cuts to
balance oil market.
Crude for May delivery declined $0.38 to $47.59 per barrel.
Data from Baker Hughes showed that the oil rig count rose by 21
to 652 in the week ended March 17, which was its highest level
since September 2015. Signs of growing shale output undermines the
attempts by the OPEC to eliminate the supply glut.
The meeting of OPEC and non-OPEC oil producing nations over the
weekend agreed to review the oil market conditions and meet again
in April regarding an extension of the output deal. This was an
abrupt change from earlier draft of the statement which reported a
"high level of conformity and recommends six-month extension."
Further weighing on the currency on the currency was risk
aversion, as President Donald Trump's failure on healthcare reform
triggered concerns about the prospects for his plans to use fiscal
stimulus to boost growth.
The loonie showed mixed performance in the Asian session. While
the loonie rose against the aussie and the greenback, it held
steady against the euro. Against the yen, it declined.
The loonie slipped to 1.4504 against euro, a level unseen since
November 2016. The loonie is likely to find support around the 1.46
mark.
Survey data from Ifo institute showed that German business
sentiment improved in March.
The business confidence index rose to 112.3 in March from 111.1
in February. Economists had forecast the indicator to fall to
110.8.
The loonie eased to 1.0190 against the aussie and 1.3350 against
the greenback, from its early near 2-week high of 1.0155 and a
4-day high of 1.3321, respectively. On the downside, the loonie may
locate support around 1.03 against the aussie and 1.345 against the
greenback.
The loonie remained lower against the yen with the pair trading
at 82.66, after falling to more than a 4-month low of 82.56 early
in the session. The next possible support for the loonie-yen pair
is seen around the 81.00 level.
The summary of opinions from the monetary policy meeting showed
that Bank of Japan board members viewed that the bank should not
rush to action and it should pursue monetary easing under the
current framework with patience.
To achieve the price stability target, it is important to bring
the economy onto a self-sustaining growth path, members said at the
meeting held on March 15 and 16.
Looking ahead, Federal Reserve Bank of Chicago President Charles
Evans and European Central Bank Chief Economist Peter Praet are
expected to speak about the current economic conditions and
monetary policy at the Global Interdependence Center in Madrid at
1:15 pm ET.
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